Genworth Financial (GNW)

Tim Owens Genworth Financial, Inc.
Thomas J. McInerney Genworth Financial, Inc.
Kelly L. Groh Genworth Financial, Inc.
Kevin D. Schneider Genworth Financial, Inc.
Ryan Krueger Keefe, Bruyette & Woods, Inc.
Sean Dargan Wells Fargo Securities LLC
Thomas Gallagher Evercore Group LLC
Geoffrey Murray Dunn Dowling & Partners Securities LLC
Josh Esterov CreditSights, Inc.
Peter Troisi Barclays Capital, Inc.
Call transcript
Due to licensing restrictions, you must log in to view earnings call transcripts.

Good morning, ladies and gentlemen, and welcome to Genworth Financial's First Quarter 2018 Earnings Conference Call. My name is Daniel, and I will be your coordinator today. At this time, all participants are in a listen-only mode.

We will facilitate a question-and-answer session towards the end of this conference call.

As a reminder, the conference is being recorded for replay purposes. you during using today's the that phones phones, call. ask headsets or Q&A we refrain cell from speaker Also, portion of Tim I presentation Relations. to like Owen, to would Investor Head turn of now over the Mr. you Owen's, proceed. may

Tim Owens

Thank for Genworth's you first and call. joining earnings you, Good XXXX operator. everyone, thank morning, quarter

all referenced were you release was website our followed posted supplement night, these Chief during call. our this encourage released of be We our press Financial review you Kelly by Chief Our from financial morning Today, and to to President and last Officer. Groh, our McInerney; and Executive will our presentation materials. will earnings Tom Officer, hear and

comments, up will open prepared a the our question-and-answer we for Following call period.

Chief Investment questions. Sheehan, In Officer, Operating addition to Officer, be your take and Chief our to available Schneider, Kevin will Dan speakers,

During statements. this forward-looking may make the various morning, call we

earnings and note turn our McInerney. statutory statements. timing statutory the foreign I'll rules. cautionary as exchange. of please read actual forward-looking the statements differ you with the estimates of non- businesses, Our talk may our GAAP our results finally, filing This results supplement, on be results Reports measures due our to SEC. and with impact from have all such advise meaningful in our are the risk now, believe to notes of of non-GAAP discussion GAAP CEO, factors investors. Also that exclude when regarding the as over also We international SEC the release as call includes to we where In filed Annual Form statements. related financial been release the the most to materially references may accordance Tom XX-K earnings reconciled to measures percentage recent the in And investor of well And required changes presentation, about that morning's to materials, we financial

Thomas J. McInerney

these our earnings our well made quarter Today like update today's quarter announced update providing results. with updates earnings and the first overview call, ongoing Oceanwide. pending as pending results, of by initiatives. for performance, our brief a with to several will on review fourth against call. the Good respect financial Since you as company our I thank joining start progress initiatives our liquidity. quarter strong in-depth you will on provide more provide on then holding Oceanwide, to our an Kelly with first on update and and we additional morning information transaction we and a strategic will have of sale

to remarks Following open pleased the performance. our operating Genworth's prepared first call we'll with questions. strong I am quarter

the $XXX quarter or operating share. $X.XX adjusted million was income diluted per For

growth mortgage businesses. solid businesses had strong our capital Our excellent insurance and of each global with in levels results,

our we in in as updated to year-over-year excluding the increased of with strong performance and year-over-year million force million, to conditions. housing the income in economic very underlying in earnings experience higher Australia, $XX continue In million to increased XX% foreign strong with income XX% benefit. And and We to quarter foreign curve Canada to of $XX year-over-year MI, earned Canada, reform strong income loss operating adjusted impact operating quarter premiums part due adjusted operating a currency, excluding market businesses. U.S. in $XXX the growth, adjusted pattern. loss performance driven insurance tax Starting the also had first and U.S. currency, increased impact XX% by

long million insurance driven operating loss life insurance by of continued generating $X faced segment headwinds, losses. care term an Our

action move plan will that However, long continue these insurance offset were challenges multi-year we XXXX. expect continued as by term care traction partially on through our we rate

significant the leverage our future. experience higher intended decades premiums shown make continues the to significant as annual the of on cash There progress our are from Genworth's into to legacy performance Genworth earnings presentation, claims to improving over is flow cover higher on which XX paid slide expected As premium are be LTC of these the increases policies. to

continue increases net next under additional force additional years, annual premium our will multi-year over add plan we basis. to rate to on years action policies value on flow Genworth seek five in future of which estimate to We the billion $X seven an our a cash present

the extended together last extension a time have now Let agreement approvals evaluation the required is regulatory Since an transaction. rights to Genworth more reviews, X, Genworth our time of continued on for to whether to performs the me it board considered, In an is Oceanwide pending is for our alternatives. note secondary update, assess important It the conditions for XXXX. to and Oceanwide termination each transaction stockholders and July Oceanwide merger best Genworth's a under period versus allow closing merger regulatory work to agreement provide have on and other transaction. order update that the

first agreement the the it for extended continues Oceanwide as Australia Genworth board stockholders. the value believe transaction most merger and Oceanwide Also the proposed transaction. approval to received and in best quarter, regulators the during represents that for Our certain from

proposed Investment announced we last or CFIUS, our review to them with in provide transaction. with the Committee notice and As re-filed time the Genworth joint on week, their withdrew to United Oceanwide and discuss voluntary and additional Foreign States

We personal The involves committed process, to our are in effective is We period by step us meaningful to ongoing encouraged data directly all the parties. agreed acceptable our that for provider one we security conversations productive which period. believe a fact to risk the solution with an review XX-day continue a the data and a in risk that policyholders. of mitigation is safeguarding proposal of proposal and Genworth a our re-filing to offers following Oceanwide The this developing plan third-party the both CFIUS a re-filing service U.S. fully about proceed additional mitigation to enables day presented CFIUS February. investigation are that

the our million, transaction, GLAIC. purchase a $XXX We about of market for GLAIC discussions un-stacking fair have with had is believe Genworth extensive Oceanwide Delaware and of value including which price the regulator of the

in methodologies Delaware, fair were we a agreeing valuation successful not acceptable after discussing mutually with various market value. However, on

a Oceanwide constructively with a finalize result, applicable the seek required filings for the hearing a Genworth and All on working we'll working un-stacking. These regulators the in to other future. parties to transaction. are filings are necessary with for changes amended Delaware required, transaction approval schedule amendments, Delaware the As to the and are no complete and regulatory near

the original Oceanwide of Genworth's this will of to the at included un-stacking make fund a also commitment the a commitment of included contribute due by to closing the of without not to transaction. Genworth reminder As May capital million contribution for the transaction XXXX. $XXX un-stacking. The of structure Oceanwide retirement capital of contribute a million structure original to in the debt this $XXX capital transaction Oceanwide by the

million $XXX given in use where was not a Genworth allocation. transaction, along will a capital Genworth Oceanwide for $XX this term investor $XXX secured the delay contribute of on million affiliate announced, the an cash the with of proceeds this Oceanwide of Accordingly, debt. will retire the million completed XXXX to financing closing previously As loan the purpose. lead with hand other

and of for consummation on stream would ratings use an primary various additional were parent, are Genworth and Oceanwide in Genworth currently believe mortgage insurance billion from pursuing XXXX we the would of the debt insurance that to level. sustainable best $X to financial Given cash Oceanwide to reasons to improve the $X.X contribution to a growth the billion margins. once Genworth, remaining Oceanwide's other debt in due will is level. at an whereby future reduction to of our developments, sufficient to the flow the to contemplated platforms we as following cash and flow our of more the is XXXX, well aggregate dividends isolate the investment We to business. and developing and transaction. over primarily capital that create bring new from retiring mortgage or be contribute financial with for dividend a potential The opportunities ratios in Genworth service the debt the enable businesses, $X.X coverage leverage flexibility considering comfortable business focus believe our a these as un-stacking the debt three plan, our to currently the billion debt capital At range a of LTC manageable alternatives, billion level, further other believe to U.S. service protect of uses After $X.X our time

new this ratings the companies Genworth's service plan of reduction level We improve the GLAIC means The un-stacking be for GLAIC in would This $X to be expect for the policyholders. debt used benefit also not to the over near will future. believe can parties debt flow strengthen cash and time. a of the finalize needed to life the billion of capital

to how discussions of we with will to $XXX that we handle previously determine Additionally, the in agreed the million GLAIC. contribute are un-stacking to Virginia Genworth

We an commitment in as regulators will intended to as with the we move update course due seek capital with finalize and the as of review use quickly a the process provide forward possible.

to turn I will Now, over the Kelly. call

Kelly L. Groh

good some and will cover cash and the everyone. first Tom context our key morning Thanks, Today around as quarter I uses well company. our sources holding provide at as drivers results and

quarter's with quarter adjusted for of $XXX performance. and income $XXX net We this operating income Let's financial begin of million, reported the million.

insurance businesses. performance loss reflected Canadian Our in overall and continued strong results U.S. mortgage our

annuity business performance care life by U.S. results Our mixed offset insurance. losses and fixed in with life term strong insurance long were

businesses, Our come for after-tax individual and tax prior Australia countries. Tax some in our primary for Act, periods. more results. earnings in U.S. businesses when rate and discuss versus recently those our rates I which overall to U.S. will XX% from local expenses an and our most life closely and with Jobs The in million approximately our This additional insurance reflect from of MI XX% lowered overall corporate. Cuts benefit tax Canada more results to lift XX% and did $XX I tax benefits explain to passed provided the business of effective businesses

periods, recur While benefit international the to by I subsequent in will due pre-tax mix do to businesses. changes amount income of our income vary expect a our in and

points in underwriting improvement in seasonally our quarter year's we The delinquencies, of last MI, expectations. loss to and steady prior regions. results first insurance continuing not the reflecting and prior most low perform the unemployment favorable levels, consistent driven all which our and material solid housing with aging. U.S. down businesses, year. Incremental quarter, mortgage X quarter the delinquencies higher saw XX points economic loss strong is new cures from hurricanes is by these were In performance from lower X%, Moving trends our was quarter from across our ratio with the to losses for growth,

higher reflecting additional refinancing interest rates, $X delinquencies by XXXX. the for quarter versus of tax reserves approximately continues in did U.S. We trend approximately million in elevated $XX hit lower million in hurricanes The periods. are rate stronger, prior reduces Persistency lapses. which improve by holding driven the to areas earnings

seasonally from $X purchase XX% market. insurance and originations, year up was the primarily written but smaller sequentially, billion, insurance New from mortgage decreased XX% down origination refinance versus prior the a was larger market, primarily

sequentially mix of due in Our the selective declined continued our to the participation singles prior and versus year market.

continue to of uncertainty, monitor mitigate market modestly transaction as this are offerings given periods. expect our to share ratings as our some our be our overall that share We quarter our than to market this versus we product lower capital served differentiated service prior pleased well up but levels closely and and we strong pressure as have competitors,

points insurance businesses a from primarily mortgage our ratio in new loss Turning X severity the delinquencies. prior of increase Canadian XX%, reflecting quarter increased to modest to Canada,

$X in the of are normalization has primarily to are currently and XX% in the of prior closely X% exceptionally going beginning now been we XXXX. from year. The changes territorial corporate effective range, of of losses is full-year XX% market strong, U.S. anticipating expect ratio as do Canada is the tax tax regulatory by a rate. of reflects in XXXX some the benefited unchanged effective approximately earnings loss Insurance a loss more approximately made in the forward, rate with with to performance increased pleased due While that reform our guidance. were This ahead that which we XX% prior Flow changes demand the increased versus Written housing larger the New Canadian quarter first million of

Moving the Australia, quarter loss XX%. was in the to ratio

points fourth sequentially loss and delinquency curve versus points X adjustment seasonal in ratio X have quarter higher driven of Excluding the a been aging would prior the lower level year up driven by and cures, by the earned premium. the down earnings

unearned resulting Australia in As review applied premium a fourth of of reserve premium retrospectively pattern completed reminder, of our U.S. a XXXX, adjustment business in that quarter for the accounting. cumulative the earnings its a GAAP was

prospectively earned normalize as to the be I than which increase XXXX, earnings time are expected longer several As over to different Australia the $X earnings then do earned a of compared the over premiums the reform earnings U.S. U.S. versus horizon. result when benefit earned but treatment locally. $X that rate. and This is differences changes, for to GAAP tax will and during IFRS years next premiums, adjusted benefit result a the The these smaller curve of GAAP premiums want Australia, note was curve metrics adjustment in was thereafter retrospectively. million from reports in level loss quarter given Canada versus The ratio earnings will local absolute between tax the the business Australia of their and million. higher in

to lower from from a the share. Australia levels business decline market due down seasonality in NIW lenders, year flow certain were XX% and and sequentially versus down penetration XX% market prior Our in

our generally but most to first fixed benefiting our quarter impacting higher our business. insurance annuity negatively insurance care mortality life reflected our our life term of Moving segment, products, U.S. insurance and lines, results long across

seasonally blocks, higher policy experienced newer versus higher In and We which locked-in earnings we in our active life, and term long see terminations available on care severity also in lapses insurance and or claim did experience was our assumptions claims our business. LTC acquired by the business, block. benefits higher continue from utilization to offset existing lower LTC experience LTC of our term higher

is been benefit experience reserve were claims on assumptions has favorable terminations early utilization claims. muted from the XXXX, While since existing experience benefit in claim updated claims being our by higher duration overall unfavorable primarily

are experience quarter. on and prior new for Earnings to it We true-up down in the monitoring the to block continues as termination acquired develop. were sequentially unfavorable closely our trend utilization a benefit from due claims

tax XX%. are estimates, swaps quarter term these each long lower like U.S. going results by the XX%. at While and our million in earnings care million they the is once expected on to our I gains forward rate actuarial tax change time. This be of best taxed in rate approximately provide the amortized impact trued-up are our corporate The do models forward reflect quarter finalized. expectations $XX the $X swap approximately remainder be XXXX. were income that a forward which the roughly change first the that prior were Only taxed the at losses will were lower after quarter. the income to for settled This impact amortizing on from year's XXXX starting gains to by was and the some context new tax LTC from quarter for some on in same starting last also settled is would rate amount driven tax for swap business performance rate at for of drove

First, less vary can factors, while experienced a year. second on of half claim termination of have levels and number generally favorable based terminations in the expect claim the we

life are to rolling experience. basis disabled actual reflect to made done reserves updates our utilization a Second, on

in our duration. early particularly trends in we mentioned, versus are seeing utilization, expectations As elevated the

to will closely. We continue this monitor

starting to the Third, to are earlier, in in from from income expected rate swaps remain benefit reduced year. forward. the amortization XX% quarter be saw actions forward expense of of levels increase we tax XXXX discussed tax we than our rate the our differing elections the the in treatment Fourth, rate releases as reserve tax to on the throughout certain expect going actions in higher force modestly increase versus will federal first aggregate of as implementation quarterly

as continue we and new to claim age. our to continue anticipate in severity blocks growth counts Lastly, a higher

claims this modest and annual quarter-to-quarter review could reserve in our of in any the testing and remainder experience. in margin earnings items result assumptions specific expect half from annual we on with absent impacts Given second the the year, our of depending variations that of these LTC XXXX losses

their mortality. business from mortality life deferred accelerated associated and higher term premiums in quarter, life and modest versus XX-year with premium to life offset the insurance continues universal which in term of to pressured Turning improvement term lower prior write-offs unfavorable with life periods, lapses insurance, life partially result primarily be post blocks was XX-year the costs. although large acquisition level The entering

to the to increase We in remainder tax $X block addition XX-year to then mortality XXXX, expect quarter continue per reduce after reaches as during results the of larger period. of trend by recent to from in did this annuity, the the end million tax premium and approximately level benefit XXXX relative favorable lower In a fixed trends the rate. see we

across the to U.S. million a $XXX of our positions excess at to end This continue the written. of In from finished sufficiency Now, and XXX%, driven businesses insurance assets platforms. growth XXX% a at was up fourth where insurance very cash I'll end solid partially quarter a assets, on PMIERs first move levels, new the MI, the capital all at a or required capital with quarter flows of maintain ratio strong mortgage performance offset above first the required in strong quarter, XXX% and by XXXX. the that of positive business by was primarily incremental of we

capital potential to buffer, will could with compliance We XXXX. be a our management continue as PMIERs XQ early GSE effective and we manage as consider standards new believe proposed prudent

remain test MCT MI we performance have Canada XXX% quarter, the our XXXX. sheet XXX% resuming in business, XXX%. of capital strengthened U.S. estimated initiated of continued operating a or the North to significant regulator which unassigned to with the and saw strong continues In Given during above a MI's conversations range balance an positive we company's surplus, dividend capital ratio minimum around Carolina with

in completed company's holding pro-rata on million share basis to company of MI XX first Canada dividends, holding quarter repurchases XXXX. we our with million the That ownership In $XX a percentage. addition as participated to CAD their the brought ordinary of

MI high from with program quarter market Our a of to a approval. the on announced paid completed to depending $XX rata we Australia million million Australia participation of Including also ratio capital this an total share and XXX% in XXX%. the fairly new a XXX%, $XX ended ordinary the shareholder noted, the international over buyback I basis, subsidiaries just Capital during amount insurance actions on capital mortgage FX company of measured along or capital target completion management XXX from Company company, the quarter. approximately in buyback, in XXX% remains completed, estimated first received consistent prior is end above holding as assuming Canada, of quarter could of When business a on to range by yesterday the bring estimated time. level $XX repurchases quarter conditions basis. market our Australia GLIC to initiated prescribed to rates to dividends the XXXX. our Life and on net at with is share dividends Genworth million subject which in XXXX, originally pro AUD a our action Similar and of Insurance million risk-based proceeds

large the rate cash were law, our earlier from testing last non-economic New revaluation and or disallow decline results, entity under flow XXXX noted levels we the deferred As drivers RBC assets GLICNY which tax of our future quarter, of actions. unapproved tax new York the

our ongoing We our New York regarding regulator pending LTC rate dialog action with request. to continue have

NAIC to factors the lower We the and with tax the to discussion after adjusting follow the regarding incorporate are ACLI RBC also continuing rates.

the rate tax we RBC factors reduce our expect factors not to yet known, are lower RBC final ratio. While

year. prior proceeds of ended This over of $XX $XXX was including are completed dedicated with operating by that of Managing assets. end balance quarter and debt of first expenses of compensation the that million quarter debt. includes quarters the to payments, at net number and items the cash in fees term quarter driven us. companies levels issue the certain reimbursed million the remaining and intercompany a had loan, factors expenses businesses of a advantage holding net Moving tax to throughout other of mentioned. the debt in paid company, by for of $X.X by recently market offset and focus XX and liquid maturing the pay trend The million $XX for from opportunities be approximately million Note increase million was million expense, including and higher to quarter mostly the billion discount $XX and May of approximately just interest continue cash the partly from dividends taking I $XX we $XXX our our the the

a Given additional dividend, more we that U.S. two no and our remain debt to maturities we MI is committed business. preparing than for deleverage years, resume have to

modestly our versus cash X to service times times plus forward debt target are We buffer debt previous million. targeted $XXX our of lowering X.X service forward

changes still strong monitor closely forward, determined of an million $X.X a the investment that believe our to to flexibility GLIC. are expect this maintaining plan billion initiative with discussing to be in because $XXX that capital that will the our to which is over debt the the levels the Tom deal subject mentioned, be is stacking do was debt not plan improve timing ratings U.S. and reducing un-stacking. XXXX we the original to consummation Also, levels. these contributions for of level but this any we forward capital for time. provides made We action the as going This merger, expected a liquidity maturity, given with contributed won't for life us and prudent financial delay earmarked going the Oceanwide and million flexibility May $XXX this to I expect capital the and intended timing alternative be while of will

justified LTC As capital the we $X.X upon approving of satisfy the obligations. to action billion previously, said the within rate plan policyholder must and management rely statutory prudent have the company, regulators in-force actuarially of GLIC

capital May But be current and the no which business, retire capital with insurance given deleveraging with time. delay the our the updating mortgage the allows will debt Oceanwide. for in performance investment of our us is market we along very our provide this main the priority this transaction intentions to XXXX term additional pleased appropriate have with up, loan We something's global with maturity the am at to I execution

U.S. life remain progress it open be challenged, including for LTC other business. up intended continues While With action and improve our the let's plan rate we to to our questions. strategic this operational actions that, business focused on


of We Please sir. now take first comes ahead can go It KBW. Krueger our Ryan question. from

Ryan Krueger

morning. Hi, thanks. Good

question CFIUS, on end a period review short-end will the another the that make given period? or decision your is First time, this expectation this it way review of one final they at

Thomas J. McInerney

for thanks your Ryan, question.

would first course we're The I productive encouraged on say I we're focus having period. is, think the XX-day thing conversations that investigation with of CFIUS. And to agreed they

data I has up. on a assurances third-party tell give think point, this we U.S. And up. where But difference. we'll of the provider security will period. any is where continues can't end depending obviously made would hard to we But CFIUS at the end the review We hope that this reach that it on will end conclusion a go. it where after that by possible conversations

Ryan Krueger

(XX:XX) as terms value heated in the the the that then merger you was there issues to agreement GLAIC approving only of Delaware, other out from work Got there were of well? it. on And was need Delaware or

Thomas J. McInerney

about advisor wanted North say key Kelly all approve York Yeah. would I forward the was the Virginia, from sense states, talked the have comfortable New filings of tried repurpose transaction to flows It move the of $X.X all another and billion to to we the other and we the made the going $XXX question. transaction, to Ryan, their given the that Delaware to ultimately, benefits, that do generally states the saw of felt we're transaction, place at without structure concluded deal. Genworth in un-stacking, the an this been it capital the and to I to GLAIC the are the we confident that go Delaware Delaware, gave longer redo And for to without and because back and transaction forward issue A and I deal, that have Virginia, the get point reasons supportive Carolina, of have are and to future now the pursue million. we Oceanwide that. I that un-stacking in they but plan, the supportive un-stacking. dividend with the always the been Form we to the cash has that value right stream with new meaningful no – are differently. do capital because but and the that more while regulators a I'm the and regulators it but and un-stacking, go with new We think Oceanwide

Ryan Krueger

one contribute it Thanks. GLAIC's GLAIC, just be still intention that one the to deteriorates to no scenario in And a comments case on would the then capital capital last there additional intervention? that of where position you in not that company additional to in the any in would parent that position point still be the circumstance? was the regulator Would capital put it you have

Thomas J. McInerney

then of the ratios a that and And well in-force years, you're think forward. believe capital that, at claims, it the they action rate the doing the we be point we losses good our of and we've last minimums talking the the and capital think this the had three we and long sufficient is books, the on and life cumulative from and billion we have fine plan as companies, increases given with future $X.X that legacy made the very and years billion I premium I in that plus this of $X.X conversations think companies, of very understand five stay the as about. we've will and regulators to lot management businesses above on multi-year the we a to are going had during the given run that trends, We've clear,

Ryan Krueger

you. Thank Great.


Sean It Dargan sir. from question. along Thank now may you, comes our We Wells move next to Fargo. of

sir. open, is ahead. Please line Your go

Sean Dargan

have price. Thanks question about share the a and I per good morning. deal

presented would in that they would XXXX, economic benefit the for contributing was be $X.XX de-stacking be the way of presumably this from per So receiving they which share. Oceanwide sort But some million. was were paying $XXX

So I approval per proposed parties the that change some offer has to the has involved? there changed, been wondering, from, guess, acquisition and I'm needs share material the

Thomas J. McInerney

to Both and was change in the no $X.XX to has felt per deal. that purchase signed the stream the since been future has there It debt. and been the service we share important the Genworth consistent Sean, from GLAIC Oceanwide that So remains price. dividend

However, given at we that the projections didn't stream dividend million paying make fair our we of couldn't $XXX sense. on than million, agree value the given think what market $XXX more is

also in said, if is needed. dividend and GLAIC on $X down have for I and it so with with ongoing debt a MI strengthen get think to margin. the discussions LU the primary the billion, LTC. had new and be Chairman comfortably to comfortable business can But that I capital others. opportunities U.S. There at cover But debt, cash we significantly billion uses three the I the reduce service are new so is will range, debt. can be and MI. And to stream the we've MIs debt the the will And then Kelly forward, as we the debt service think a and the and from and plan, flow be U.S. lower come in $X.X used also therefore, And I Oceanwide, focus primary up going the with

paying still And Genworth were they're deal a so comfortable un-stacking. it's for we deal good for and Oceanwide, that Oceanwide no value still and the the makes both sense with

Sean Dargan


in de-stacking. it? have Is debt contribute And consideration will the retirement so to equal about that to $X.X think billion the for Oceanwide amount that the that that contributed of roughly way plus time, they terms that's would over

Thomas J. McInerney

MI. contribute the again felt and so for important improving ratings, capital reason for Oceanwide was was it that particularly main Genworth on the primarily focused Oceanwide to U.S. Well,

to un-stacking. But team $XXX we're so the covering significant un-stacking. the retire million term the is term and was Kelly doing Obviously that we the investment and we're $XXX has value, Oceanwide. and that debt, debt the on ratings, million And not through the loan accomplished, improving the for still to to need strategic secured XXXX and original focus value the long capital

and the the it that alternatives. ratings, look back would we'd particularly things shareholders. they're $X.X the And us the certain think of to think so the the to company shareholders paying goes best share billion and to other And the the MI, We at, is, like add at I for to be improve company. value primarily versus to investing they're those the way at help it's U.S. compete that our in value all for most market $X.X get marketplace to billion which

think I make at look contributions. the Oceanwide improving company, those is, and to Genworth that's worth term we're the to the it Oceanwide so it long And way value of and

Sean Dargan

Thank you.


Thank along of It Evercore. Gallagher now question. Tom you, next our comes sir. to We from move

sir. open, Your ahead. line is go Please

Thomas Gallagher

Good morning.

what I be to they're to new with understand approval I be exactly So Tom, want voting from sure going standpoint. and situation Delaware just on an the

sure within right. whether it's forward stay legal just explicit for is fair by to voting right potentially or life long would that implicit capital term that, future care? it entities So Is be annuity fine they'd any is to fund Because that way, their essentially have going want say make the to is future and going I but the to business needs Delaware that on? going to that capital I that any generated what foreseeable I is with the think be for

Thomas J. McInerney

I a the your great to that's right, is think hypothesis that do not question, and going Tom, we're un-stacking.

any owned GLAIC be GLIC. So by still will XXX% so – cash

products And GLAIC over that dividends again, are $X.X future life annuity will from all the billion from any support the premium generated will the comfortable of capital once have. business the stream. company remain the retire have and the that we outstanding while in And paying help time life we future used the with that to basically if to claims are debt for we also $X.X plus own regulators XXXX, the GLAIC, are with the increases an realized our be needed there that will the think they And families. capital was debt So all important the service, on that we billion I now, that.

cash which the from the big flow, companies, don't because most for used GLAIC deal, you future can it of to we don't without have importantly perspective, because and we from regulators' now be life the need capital support as support a the and Now, suggested it's benefit the a policyholders. Oceanwide policyholders

So moving regulators no they they that's I and with with un-stacking. are the support forward comfortable been, have why will always deal, think I think the

Thomas Gallagher

the just paths? now are CFIUS makes clear they you is CFIUS or would the and of say or before that, And are a point a to hearing Delaware independent there path holding at waiting in Okay. before, still on this determination, terms they

Thomas J. McInerney

the Another could CFIUS regulator between no other set and decide their we own connection of regulators. good questions, affect with the Tom. There's other Obviously, They're doing all regulators. regulatory process. one whatever

going un-stacking into the working that we've to to with and the Form to But now that a the filings legal made with teams are you have change the A no businesses what update capital deal take do commitment. have different is reform So deal to our re-file account. and to

date, that. think goes hopefully several I So ahead. at will will set probably And it. a at will and other that then hearing some announcement; Delaware look weeks. usually that's take all days That an XX be of regulators make point, in, re-filing the will we Once Delaware

process. to we'll And as get agreement so July Obviously, extended through it's hard to the X. merger that when we date say know, you

current our deal as So we the done. we when that's view get think can to

Thomas Gallagher

then quick going that just that development long were a The got points. expectations I other cash negative those the And for care, have around only expect through, to went do a few similar commentary or ones that statutory term be GAAP for loss to issue, XXXX XXXX? Is a and impact for you for small laid I me. from the Okay. in out

Kelly L. Groh

Great question, Tom.

to do term on to statutory mentioned our it thing cash additional losses expect York, And to company, we do reserves holding we on testing the considering prepared approve And when I New long that about really the by York put with did perspective, wouldn't holding to not have small from year-end. a flow as you, we at on my New on with up testing facts. well. based have One regulators I'm on we up the care York. this dividends had reserves what cash, of if We in lack New side, that, of the as we guided because Regarding remarks is, or an associated is re-filing put active remind additional side flow the those cash that this think the in statutory way. company Kelly

Thomas Gallagher

then final one sorry, one. And – Thanks. Okay.

in do good the do given Just the be flows? you won't that or going what's some you some point businesses still life between have coordination annuity coordination still other on good to dividend that situation, limiting state there the long any flow your they're states feel Delaware restrict here care and really in and term regulators and that among very could the holding feel dividend risk is there at Like, companies? you unrelated, over

Thomas J. McInerney

GLIC other the hope use billion comfortable We flow that it's and capital for range. working time, that's is And together, life allow a $X profits, the will perspective, get the a GLICNY, may get if difficult mean long-term question think to will level Obviously, cover much Oceanwide our the the using in companies capital And level get a to of at will used all on billion intention answer. debt the need, generated all that life have annuity purposes. we that the GLAIC together but comfortably given and I upgrades leverage some to that potentially work the of by the that on three in debt rating be care. for a from to I or to future We we companies that we're then side, service companies. $X.X life the three the to premium those a states margin. pay for our plan claims plan debt of do by MIs with remain coverage, the to that the increases cash will over that to place better

we the from manage don't because capital we the because provide this enough debt, the service is flow a help for have level flow need I the regulatory So it from deal cash alone to that to the a think GLAIC perspective, where will very now company. plan us strong cash MIs deal,

Kelly L. Groh

Yeah. just got for incredibly to to The XXX%, well Australia our businesses. versus approved look just levels; from strong I And of share is of $XXX with thing ratios park it in that to occur the Tom, within the updates over but this capital they They're the obviously at strong, MI million watching our million standards. as each than of We're that three Canada got would MI to that, add Kelly. target a and fact at buyback the XXXX. given XXX% so capital is evaluate you've XXX% U.S knocking current frankly, had to we do that, greater PMIERs will $XXX out what U.S. such we'll get MI out dividend expect there and

Thomas Gallagher

Okay. Thanks.


question. move It comes We next you. along Partners. Dowling Dunn can Geoffrey of Thank our to from now &

is sir. ahead, Please Your open. line go

Geoffrey Murray Dunn

on I price is Tom, previously clarify, morning. to just China deal you Good a Oceanwide. not said plan you. with still shifting, the Thank per but share want you're working

but process, that is price changing? So in not the you plan still can that share say definitively offer is

Thomas J. McInerney

obviously rating that we're competitor. because connection important is MI's agencies. that and The capital the use the below of share. also will LTC share Oceanwide the get maximize the hopefully with is remain the per and changing, to drag on discussions price benefit, not $X.X be want And below and plan, want how at is where What billion billion to ratings. $X.XX U.S. $X.X We working rating require where to maximum we the most its is Genworth is and – on against MI rating own, still both that's because upgrading would U.S. it it its with maximize

of So Genworth of cash that think help U.S. but a we rating ultimately, its to hope to and significant debt can. that I all parent, opportunity plan, over should, Oceanwide and see benefit with make time. meaningful think rating both the the down, doing we We're to agencies make for getting a coverage rating flow up, we positive working impact also it MI, the maximum will should the

Geoffrey Murray Dunn

you the today, level? an BP side? and pricing pricing And to on do bank decision or new but there monthly Okay. the can market discuss And at this that of (XX:XX) regional you community your not match for is MGIC's discussion more think of (XX:XX) out the black box reduce opportunity demand in fully also

Kevin D. Schneider

take I'll that. Kevin. is this Geoff,

tax did – time, Over we and by Number helped move changes, of across law I across just competed the would it handful down. margins pricing the It the market marketplace attract at just we sustainable you into significant of decision we a ultimately the that industry was things. pricing. think benefits from absolutely the make in had margins and on think can't a earning space realized business expect the the will to where to that driven will benefits go-forward significantly. I space, be that those be the basis the one, on those books capital additional are

of the every they of a We our to therefore the have for increase, our loans we we competitive edges in seeing attributes. very where were where change regarding little being drivers changes key went. MGIC win only amount very bit did, think additional of that difference similarly the we business. provide the from places some earn increases The And taxes, those with a a got of responsive to think, in made the with loans We risk following refinement be delivered because on and we that competitor our Our sort marketplace. in day. to business largely to is over, where risk we align we was of single price that were business we started benefit couple with the

to rate to those appropriately to market, that debt we out. for We've both get sort co-borrowers So price for standard we into community our it the been those of transparency around thought cohorts to question, an – to reflect my leads much how it customers, that re-filing perspective into to us, your the we and that what there possible experience we second as cards, this of consumers, to expect point be the transparent business. in the basis. the to analyst introduced those we we was the to provide income from important in our as did given at time, a was be, opportunity trying think in our it it level, is And more and a

going of of transparent it we goes where But you two-tier to just becomes end focus what it, public operate type it market marketplace with a transparent a provide the guess, to and clear straight both the a so I hopefully ultimately sort that's pricing this as of or in in whether where way overall and the with, has rate continuity described in marketplace. some our rate don't some And air, is to approach where card, I approach, would operating into up. like box know some statements in been deal in to is card the we're lenders our can and and that provide, the black

Geoffrey Murray Dunn

Yeah. Thank you.


comes We of you. CreditSights. It to now Joshua can question. our Thank move Esterov from next along

is Please line Your open. ahead. go

Josh Esterov

de-stacking vote suggest Yeah. given the A CFIUS state may GLAIC to strategy since with was re-file the require again in Thank a new with you deal need very terms? deal to that regards new does that regulators, closing? new require to with agreement And in this much. Good morning. Form a to with of future Will tied merger does the that new shareholder for filings reflect shift a de-stacking precondition you

Thomas J. McInerney

Form filings. Good a the questions. A not our structure do counsel, will the change changes And all impact vote. the require deal the the clearly, Based from of think we advice on shareholder to

it's really and that, state not not regulators, security looking aspects that, into on deal whole detail there with. at focus we but the really and be have third-party the I The but is national the CFIUS, issue deal. with have, we allowed security on because And the Their that's deal into data I'm confident changes. their interests. I with national specific is that made focus to so U.S. state difference the firm And again, consider the of for they'll focus is regulators security this they're And a financial CFIUS, will that comfortable get confidential, to still that as believe so with go feel a the the and process meaningful whole the is I those issues. at said, can't very

capital is un-stacking part anything no of or that considering. the they commitment change not the un-stacking of the are So or

Josh Esterov

Thank it. much. very you Got


question. Peter comes from Barclays. move can We along Thank now you. of to Troisi our It next

line is go Please ahead. Your open.

Peter Troisi

Thanks. Good morning.

will address regulatory plan. capital assumes you how maturities the for plan a acquisition. XXXX of new you the presented receive that and approvals XXXX based for all But on course you that So the

So not you how regulatory think asset over you're of the about can and/or just if the maturities and next help couple address sales you us the financings? those years successful cadence in getting will of approvals, additional

Thomas J. McInerney

are And Oceanwide to that's we're It's we I with a XXX% a Peter, state a deal. that to all on And in things I regulators. get the do good done. think we're going particularly think it direction, question. focused say can moving I we one So lot. generally would good get asked the

this deal and extended obviously, to said a looking alternatives, of length we I to my the there compared in it deal, board looks X, this at. the comments, and we number of we're the at just have are time We extend the alternatives every that July

so think the those would be, with in of considerations I'll approval receive in we refer best and regulatory the to sales, of cetera. unable alternatives that the and if at can describe and reduce I forward those And will we language But those this we by deal alternatives what we're which basically the deal, some to asset no is and if we my best debt this some – deal the we you are, is look et margin, believe most certain value. longer to personal provides opinion significant move XX-K.

time. one plan conditions we'd will a of B go have C and on So at those we which market and D and that for depend

XXX% stakeholders. our best However, stockholders, all it's focused deal done. this for on getting of particularly we Basically, but the for for we're think really

Kelly L. Groh

this And Kelly. Peter, is

the maturity Another have debt a don't thing fact I'd we of like June XXXX. to add that until is due

to MI a forced very think, that service. don't got I businesses good on condition. with right of we're making this being our given dividend the to said, We've thing meet We to and things strong can just are And add and we at shareholders sure value what I three our by the doing debt capacity methodically not optimize think the Genworth patient market. seller Tom for in looking market

Peter Troisi

Holding one Is that number? I'm they're company $XX in to expense miscellaneous And compensation that about quarter. just any a there from caused in as Thanks wondering million seasonality expenses if quarter. look driver, like $XX Thanks. me. the in Looks that. seasonality million benefits this like that for compensation slide called Okay. the more you so maybe some out

Kelly L. Groh

for benefit the that see Thanks every get of bit different is outflows have employee phenomenon, related Peter. we in occur we little to because a for question. remarks first of things I quarter did year. pension variety we in type it contributions, the great quarter reimbursed a this address what first generally prepared question rest the the that a my didn't year It's of

items on for So that probably then basis, go modestly it remainder in three-quarters benefit was amount of other would a on two-thirds be the year. holdco expect those of the net And or that forward type balance terms to employee we about amount thinking of of the costs. positive

Peter Troisi

to be fully Okay. that'll Thanks. reimbursed three-quarters year? And you in that mentioned, that later two-thirds the

Kelly L. Groh

will. it Yes,

Peter Troisi

me. from all That's Kelly. Thanks, Okay.

Kelly L. Groh



call back now McInerney turn the Mr. will I gentlemen, to and Ladies for you. over comments. Thank closing

Thomas J. McInerney

much, working hard the your with Genworth I you as we're for deliver your financial strong questions And three Thank in In you also close to platforms, very Daniel. summary, and all and of to MI thanks time the performance, particularly as love and accent. transaction today. Oceanwide progress you continued to best operating thank will end for we've believe soon is Genworth possible, making we'll closing call. the you as But which transaction, said as in and on of in focused can. interest and the your we towards continue to the update we that interest stockholders. We're as the our continues often


Thank That participation. will call. you you Ladies gentlemen, now conference today's and may conclude for your disconnect.